Private equity firms are set to take billions of pounds out of UK companies in a refinancing glut that has raised fears of a new credit bubble.

Dozens of private equity-backed companies from the RAC to Formula One and Birds Eye owner Iglo are lining up to take advantage of the buoyant corporate bond market. In many cases, buy-out groups are recapitalising the companies in order to pay themselves dividends and return money to their investors. However, industry sources have warned that overloading businesses with too much leverage could threaten growth and damage profitability, especially when interest rates begin to creep up from historic lows. Simon Walker, formerly chief executive of the British Venture Capitalist Association and now head of the Institute of Directors, said: "Private equity needs to be careful because there is no doubt that there are risks. There are a few horrendous examples in the past that shouldn't be repeated. It is very possible to overdo things."....Read more here: Debt fears as buy-out firms opt for refinancing